China steel rebar inventories slowed YoY increase for first time since CNY holiday

SHANGHAI, Apr 17 (SMM) – Inventories of steel rebar across Chinese steelmakers and social warehouses slowed their year-on-year buildup as of April 16, the first time since the Chinese Year holiday, a sign that a high demand season may have arrived with the rise in consumption surpassing the supply increase.

On a weekly basis, overall inventories continued to trend downwards as steelmakers stepped up shipments to the market and a rally in rebar futures boosted downstream purchases. 

Steelmakers in north China, in particular, arranged deliveries actively in recent weeks. This facilitated the decrease in in-plant rebar inventories, which was at a faster pace than the drop in social stocks. 

Downstream consumers favoured cheap cargoes while spot rebar prices moved higher with the rebound in futures prices. 

SMM expects robust consumption to further weigh on rebar inventories and support spot prices. Rising supply of steel, at the same time, will limit the upsides of near-term spot rebar prices. 

It was heard on Thursday that some steelmakers in China’s top steelmaking hub Tangshan were ordered to shut blast furnaces to improve local air quality. Its impact on market sentiment may outweigh that on rebar fundamentals, SMM expects. 

SMM data showed that overall inventories of rebar, including stocks across steelmakers and social warehouses, were 80.1% higher from a year earlier as of April 16, following a buildup of 81.9% last week.

Rebar inventories at Chinese steelmakers stood at 4.84 million mt as of April 16. This was down 10.2% from April 9, compared to a decline of 7.1% last week. 

Inventories across social warehouses shrank 6.4% on the week and stood at 11.26 million mt, after dipping 5.6% in the previous week.